June 11, 2013 2:24 pm
First developed in 1947 by Stanolind Oil, hydraulic fracturing took a long time to come into vogue. But in the past few years, the drilling technique, used to extract shale gas and oil, has transformed the United States’ production of natural gas and oil. Before the rise of fracking, natural gas and oil trapped in shale deposits were pretty much ignored. No one really knew how to get it out and, to the extent that they did, getting it out cost too much to bother.
But that’s changing. A global survey of estimated stores of shale gas by the U.S. Energy Information Administration has added a whopping 32 percent to the global estimated supply of natural gas, says the AFP. Shale oil boosts global oil reserves by up to 11 percent. In other words, there’s a lot of fossil fuel out there, trapped in shale, and it’s increasingly profitable to get it out.
The U.S. has been leading the charge in the fracking, and now the economic success of the American fracking boom is spurring other countries to see if they can replicate it. In its report, the EIA estimated the availability of shale gas and oil around the world. The top five countries for technologically recoverable shale oil are Russia, the U.S., China, Argentina and Libya. For natural gas, it’s China, Argentina, Algeria, the U.S. and Canada. The report says that it doesn’t necessarily make economic sense to go after all of this oil and gas. But that balance could shift if the prices of oil and gas go up, much as the high price of oil is driving the development of the Canadian oil sands.
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May 31, 2013 11:36 am
On Wednesday, The New York Times reported that unapproved genetically modified wheat was found growing on an Oregon farm. Developed as an experimental crop by Monsanto years ago, the strain of wheat was bred to be resistant to Monsanto’s herbicide Roundup. “Such wheat was field-tested in 16 states, including Oregon, from 1998 through 2005, but Monsanto dropped the project before the wheat was ever approved for commercial planting,” says the Times. Even so, an Oregon farmer found that it was growing in his field.
According to the F.D.A., says the Times, the wheat poses no risks to human health. Yet, the discovery of the modified wheat and the possibility that it may be growing elsewhere has prompted a number of countries that rely on U.S. wheat to suspend their supply. Japan, American’s biggest buyer of wheat, has “canceled plans to buy U.S. wheat,” says Reuters. South Korea, too, has suspended imports. The European Union plans to increase testing for the modified wheat. China and the Philippines plan to wait and see what happens.
The purchase freezes are not only important for the U.S. economy, where wheat exports are an $8 billion business. The U.S. is the fourth largest producer of wheat in the world, but it is “consistently the world’s biggest wheat exporter,” accounting for between 20 percent and 30 percent of world exports annually.
And of all the wheat the U.S. produces, the country that buys the most is Japan. Japan gets just under 60 percent of its wheat imports from the U.S. On the whole, East and South-East Asia represent the second largest importers of wheat. North Africa and the Middle East are the most dependent on wheat imports.
So if Japan, South Korea and others turn off from American wheat, then where will it come from? Importers will have to depend on Canada, the European Union or eastern Europe to increase exports. (Step it up, Australia.) It’s all a delicate economic balance. U.S. farmers don’t want their wheat, genetically modified or not, to rot in storage, so they’ll try to sell it to countries that don’t care (or don’t have the option of caring) about this taint. Someone’s probably willing to pay for it.
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May 29, 2013 9:55 am
Better Place, an electric car startup backed by $850 million in private funding, has filed for bankruptcy. The company aimed to have 100,000 electric vehicles on the road in Israel and Denmark by 2010, but had deployed fewer than 1,000 of the Renault Fluence Z.E. cars in Israel and just 200 in Denmark to date. IEEE Spectrum reports:
Better Place’s bankruptcy filing this last weekend is a blow not merely to the company itself and its influential backers, but to the vision of an electrified automotive future. This is because Better Place had what seemed an extremely persuasive business model and a sensible plan for developing the plan in the marketplace.
Israel and Denmark were the first testing grounds, and Better Place had already built 21 battery swapping stations in Israel, which is about the size of New Jersey. With Israel’s small size, high gas prices and start-up friendly atmosphere, the country seemed like the perfect testing grounds for introducing Better Place, the New York Times writes. But while Better Place did contend with some delays, ultimately it seems that people simply were not interested in buying the cars.
The company filed for liquidation on Sunday, citing financial difficulties. Better Place’s chief executive, Dan Cohen, spoke with the Times:
Mr. Cohen said on Sunday that the vision and the model had been right, but that the pace of market penetration had not lived up to expectations. Without a large injection of cash, he said, Better Place was unable to continue its operations.
Meanwhile, Fisker Automotive, another significant player in electric car ventures that received significant U.S. federal backing, appears to be on the edge of collapse. The Times reports, in a separate story:
On the surface, Fisker had all the trappings of a potential player in the emerging electric car industry.
Serious problems emerged almost as soon as the car hit the market.
Fisker, with its technical problems, management turmoil and mounting losses, offers a cautionary tale in the fiercely competitive arena of alternative-fuel vehicles and of government subsidies for start-up businesses.
Bankruptcy now appears unavoidable, and a political reckoning is coming.
Not every electric car is crashing, however. Tesla, whose Model S won MotorTrend’s 2013 Car of the Year award, continues to shine. The company recently paid off its Department of Energy loans nearly 10 years early, had its first profitable quarter and is enjoying skyrocketing stock prices.
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May 24, 2013 11:32 am
Just north of Seattle, a bridge over the Skagit River collapsed yesterday, plunging cars and their drivers into the water. The Interstate 5 bridge, built in 1955, was listed as “functionally obsolete” but was not considered structurally unsound. No one was killed in the collapse.
Authorities are still investigating what caused the bridge to break apart and have suggested that a commercial vehicle might have hit it, prompting the collapse. But they aren’t sure yet. At least three vehicles wound up in the water, including a camping trailer, according to witnesses.
The New York Times explains that the bridge was certainly old and outdated, but no more so than many of Seattle’s bridges:
The bridge was built in 1955 and has a sufficiency rating of 57.4 out of 100, according to federal records. That is well below the statewide average rating of 80, according to an Associated Press analysis of federal data, but 759 bridges in the state have a lower sufficiency score.
According to a 2012 Skagit County Public Works Department report, 42 of the county’s 108 bridges are 50 years or older. The document says eight of the bridges are more than 70 years old and two are over 80.
According to the American Society of Civil Engineers, Washington isn’t the only state whose infrastructure is in need of serious work. Their 2013 report card gave the entire United States a D+ overall, and a C+ for bridges. Washington State got a C- for it’s bridges, ” in part due to the nearly 400 structurally deficient bridges in Washington State. 36 percent of Washington’s bridges are past their design life of 50 years.”
The report explains that bridges in the United States are in pretty bad condition overall:
Over two hundred million trips are taken daily across deficient bridges in the nation’s 102 largest metropolitan regions. In total, one in nine of the nation’s bridges are rated as structurally deficient, while the average age of the nation’s 607,380 bridges is currently 42 years. The Federal Highway Administration (FHWA) estimates that to eliminate the nation’s bridge deficient backlog by 2028, we would need to invest $20.5 billion annually, while only $12.8 billion is being spent currently. The challenge for federal, state, and local governments is to increase bridge investments by $8 billion annually to address the identified $76 billion in needs for deficient bridges across the United States.
The 2007 bridge collapse in Minneapolis, which killed thirteen people, made the consequences of these numbers all too real. And in Washington, D.C., a 60-year-old bridge over the Anacostia River was in the news in January as it began to fall apart faster than repairs could be made.
“If any bridge is unsafe, we immediately take it out of service,” Transportation Secretary Ray LaHood told the Washington Post in January. “However, it’s no secret that many aging bridges across the country are in need of repair or replacement, and there simply isn’t enough money in Washington to fund them all.”
Transportation for America released a report last year that mapped and documented the state of the country’s bridges. The report found that “68,842 bridges — 11.5 percent of total highway bridges in the U.S. — are classified as ‘structurally deficient,’ requiring significant maintenance, rehabilitation or replacement.”
And it wasn’t just the I-5 bridge that collapsed yesterday, either. In Texas, a railroad bridge caught on fire and collapsed into the Colorado River.
So while there may not be money laying around to fix bridges, there are certainly bridges laying around that need fixing.
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May 6, 2013 11:22 am
The New York Stock Exchange is built on incredibly quick trades. About 10 million of Johnson & Johnson’s shares are traded each day, for instance. This video shows just one half-second of those trades:
The creator of this video, Eric Hunsader, explain what you’re looking at:
Each box represents one exchange. The SIP (CQS in this case) is the box at 6 o’clock. It shows the National Best Bid/Offer. Watch how much it changes in a fraction of a second. The shapes represent quote changes which are the result of a change to the top of the book at each exchange. The time at the bottom of the screen is Eastern Time HH:MM:SS:mmm (mmm = millisecond). We slow time down so you can see what goes on at the millisecond level. A millisecond (ms) is 1/1000th of a second.
If this is confusing to you, you’re not alone. High speed trading is incredibly complicated and hard to keep up with. Radiolab has a good explanation of just how these incredibly quick trades go down.
And remember, that video is just for Johnson and Johnson, in one half-second. Imagine what the system looks like for all companies, the whole day through. It’s no wonder our financial system is hard to understand. “So much is happening so quickly that humans are uselessly for anything more than programming the computers and then sending them on their way, along with some instructions about what to do in a given scenario… and hopefully a few measures which will help avoid a global financial meltdown,” writes Geek.com.
You already have welcomed your robot overlords, and they’re building our financial system.
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